Huge Group’s efforts to acquire software services group Adapt IT appears to be all over bar the shouting. Shareholders representing just 1.9% of Adapt IT shares elected to accept Huge’s all-share offer, the JSE-listed telecommunications specialist said on Monday in a statement to shareholders.
Huge Group’s offer closed at 12pm on Friday. “Huge is pleased to announce that Adapt IT shareholders holding 2 612 719 Adapt IT shares, representing 1.9% of Adapt IT’s total ordinary share capital, excluding treasury shares, accepted the offer,” it said.
As a result, Huge delivered 3 579 418 Huge shares in settlement to those shareholders.
The outcome of the offer paves the way for a rival all-cash bid from Canada’s Volaris Group to proceed. If Volaris is successful in its offer, Adapt IT will be delisted from the JSE.
Adapt IT shareholders last month approved all resolutions tabled at a general meeting convened to consider the Volaris offer.
Although the odds are firmly stacked against it, Huge Group said it isn’t giving up on Adapt IT just yet. CEO James Herbst said in a statement: “There isn’t anything stopping Huge from building on its stake in Adapt IT, and this is certainly one of the options we will be considering. We were comfortable paying R9.09 per Adapt IT share, so why wouldn’t we be comfortable paying less in the market?”
Chairman Duarte da Silva said in the same statement that Huge Group is prepared to work with Volaris Group “as a fellow shareholder, if they successfully navigate their transaction obstacles”.
“If they don’t proceed with their offer, then working with existing Adapt IT stakeholders remains our stated priority – we still maintain that we are ‘better off together’. As a fellow Adapt IT shareholder, and now one of the top 10 largest shareholders, we will be carefully monitoring the various aspects of the Volaris offer, not least being South African regulatory approvals.”
Huge Group chief operating officer Andy Openshaw added: “There will be commentators that will argue that a 1.9% shareholding in Adapt IT is not worth keeping and that we should sell these shares in the market and raise R18-million, or ultimately sell these shares to Volaris at R7/share if they proceed with their offer.
“While this would be consistent with our message to Adapt IT shareholders that there are risks to holding shares in an unlisted, foreign-held private company, it would not be consistent with our message to Adapt IT shareholders that they would retain exposure to Adapt IT by swapping their Adapt IT shares for Huge shares. We will have to canvass these Adapt IT shareholders before making any decision,” Openshaw said. — © 2021 NewsCentral Media